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Ask HN: Competing with Free

10 pointspedalpete9 comments

I've spent the last few months building a web-app which is currently in closed beta.

Today I found out that a few months ago a competitor lauched who is offering their product for free.

I've taken a look at their offering, and I'm fairly confident that my product is better, but I'm wondering if anybody has any advice on competing with a free product.

Or if you can point me to examples of other paid products which are winning out over free competitors, I'd really appreciate it.

I'm not giving up, as I mentioned, I believe I have a better product, but I may need to tweak my messaging/marketing/other to answer this new market challenge.

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Project management is one example. There are tons of free and paid options for both.

Also, as a paid product, you don't need to focus on winning out over free competitors, but instead making enough money for yourself. As long as your product is economically successful, it doesn't matter if a free product has more users or whatever you define as winning criteria.

Word v Open Office.

I think it's been 2 or 3 times that I didn't have Word installed. And it's been the same dance each time: Look up prices for Word. Run to download Open Office. Spend about an hour doing something that would take 15 minutes in Word, despite the fact that each has the same menu and supposedly most of the same features. Go back to looking up prices on Word. Spend about an hour and a half playing other open-source word processors. Going back to looking up prices on Word. Getting Word and uninstalling Open Office and all the other useless time leeches I've downloaded, thinking that I'll never, ever do that to myself again.

I think pinboard is a great example of competing with a free product (delicious). Pinboard has focused exclusively on a core set of features, with a particular focus on being the minimal bookmarking web app. This page they created does a good job of comparing them to their competition http://pinboard.in/switch/ .

I mention all of this to say that I would focus on what exactly makes your app better. The goal may not be to win against the free app, but to make the best app you can while focusing on the paying users.

One example is online dating which is a very competitive market. The free product (such as OkCupid or PlentyOfFish) are arguably better than the paid product but a large segment still uses the paid product. eHarmony markets itself as being a site for people serious about marriage. True markets itself as the only dating site with background checks.

The key obviously is making users aware of why your product is superior and convincing them it is worth the cost.

Very interesting that you coin the free products as 'arguably better' than the paid.

You'd think it would be the other way around, with the paid being arguably better.

So, how do you make it obvious why one product is superior to another and worth the cost?

The reason I said free is better is due to this blog post from OkCupid http://blog.okcupid.com/index.php/2010/04/07/why-you-should-... in which they say a lot of the profiles in pay sites were created for free or are expired which means a large percentage of the people you contact will be inactive/haven't paid

The way to make it obvious is through marketing ;). In my previous comment I tried to give some examples of how the paysites distinguish themselves from the free sites.

One thing you might not have considered is increasing the price (depending on your service).

The reason I'm suggesting this is that you could always position yourself as a premium service as some people will always choose a more expensive option if they feel they are getting a superior product.

This of course might not apply to your particular segment, but if so, it's definitely an option.

http://en.wikipedia.org/wiki/Pricing#Premium_pricing

Compete on aspects other than price.

If your product is truly better--there is one advantage you want to hold.

Make sure you have developed and designed an amazing first user experience. Sign up and user the competitors app--What sucks? What could be better? What wows you? Make the experience so good people want to pay you

Another good one, compete on service/support. It takes commitment but if products are very similar, the service and support can be presented as what you are really paying for.

Check their user forums/FAQ/Knowledge Base/GetSatisfaction, whatever they have, find out what current users gripes. wishes, and problems are. Use that intelligence in your product development and messaging/marketing.

Out. Hustle. Them.

You need to be connected. Hire a competent sales man.

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